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U.S. Software Industry Analysis

UpdatedJun 27, 2026
DataAggregated Company Financials
Companies433
  • 7D-3.0%
  • 3M9.3%
  • 1Y-22.1%
  • YTD-17.9%

Over the last 7 days, the Software industry has dropped 7.0%, driven by a pullback from Oracle of 19%. Meanwhile, Palo Alto Networks actually outperformed within the industry, gaining 5.7% in the last week. Overall the industry is down 27% in 12 months. Looking forward, earnings are forecast to grow by 20% annually.

Industry Valuation and Performance

Has the U.S. Software Industry valuation changed over the past few years?

DateMarket CapRevenueEarningsPEAbsolute PEPS
Sat, 27 Jun 2026US$5.4tUS$697.7bUS$156.3b26.1x34.5x7.7x
Mon, 25 May 2026US$6.2tUS$687.1bUS$155.3b28.4x40x9x
Wed, 22 Apr 2026US$5.9tUS$667.9bUS$157.1b30.6x37.8x8.9x
Fri, 20 Mar 2026US$5.7tUS$669.5bUS$166.7b29x34.1x8.5x
Sun, 15 Feb 2026US$5.7tUS$660.4bUS$164.0b26.4x34.7x8.6x
Tue, 13 Jan 2026US$7.1tUS$648.9bUS$165.0b33x42.7x10.9x
Thu, 11 Dec 2025US$7.2tUS$642.0bUS$162.2b31.9x44.7x11.3x
Sat, 08 Nov 2025US$7.4tUS$639.8bUS$158.5b34.3x46.7x11.6x
Mon, 06 Oct 2025US$7.8tUS$621.4bUS$151.8b35.7x51.4x12.5x
Wed, 03 Sep 2025US$7.4tUS$616.6bUS$150.8b35.7x49x12x
Fri, 01 Aug 2025US$7.6tUS$610.6bUS$136.4b43.5x55.9x12.5x
Sun, 29 Jun 2025US$7.2tUS$599.0bUS$131.2b42x55.1x12.1x
Tue, 27 May 2025US$6.6tUS$593.0bUS$131.7b35.3x50.3x11.2x
Thu, 24 Apr 2025US$5.6tUS$580.5bUS$131.8b30.6x42.1x9.6x
Sat, 22 Mar 2025US$5.9tUS$582.8bUS$131.2b29.5x44.9x10.1x
Mon, 17 Feb 2025US$6.6tUS$588.2bUS$130.3b42.1x50.6x11.2x
Wed, 15 Jan 2025US$6.2tUS$569.1bUS$129.3b38.7x48.3x11x
Fri, 13 Dec 2024US$6.8tUS$568.6bUS$128.6b42.4x53x12x
Sun, 10 Nov 2024US$6.4tUS$567.0bUS$127.1b40.6x50.4x11.3x
Tue, 08 Oct 2024US$6.0tUS$551.7bUS$124.1b38.3x48.1x10.8x
Thu, 05 Sep 2024US$5.7tUS$551.0bUS$122.2b37.2x46.8x10.4x
Sat, 03 Aug 2024US$5.7tUS$541.8bUS$120.2b38.2x47x10.4x
Mon, 01 Jul 2024US$6.0tUS$531.0bUS$118.1b40.5x50.5x11.2x
Wed, 29 May 2024US$5.4tUS$475.9bUS$105.9b40x50.7x11.3x
Fri, 26 Apr 2024US$5.1tUS$467.2bUS$98.6b42.4x51.7x10.9x
Sun, 24 Mar 2024US$5.5tUS$465.8bUS$98.0b45x55.8x11.7x
Tue, 20 Feb 2024US$5.3tUS$465.3bUS$90.9b42.7x58.3x11.4x
Thu, 18 Jan 2024US$5.3tUS$486.2bUS$82.1b45.7x64x10.8x
Sat, 16 Dec 2023US$5.1tUS$486.1bUS$82.9b47.3x61.6x10.5x
Mon, 13 Nov 2023US$4.8tUS$482.1bUS$79.1b44.3x61.3x10.1x
Wed, 11 Oct 2023US$4.5tUS$477.3bUS$73.4b45.2x62x9.5x
Fri, 08 Sep 2023US$4.6tUS$476.1bUS$72.8b45.1x63.3x9.7x
Sun, 06 Aug 2023US$4.5tUS$473.0bUS$68.4b47.4x65.8x9.5x
Tue, 04 Jul 2023US$4.5tUS$460.7bUS$60.4b47.8x74.3x9.7x
Price to Earnings Ratio

74.3x


Total Market Cap: US$4.5tTotal Earnings: US$60.4bTotal Revenue: US$460.7bTotal Market Cap vs Earnings and Revenue0%0%0%
U.S. Software Industry Price to Earnings3Y Average 50.8x202420252026
Current Industry PE
  • Investors are pessimistic on the American Software industry, indicating that they anticipate long term growth rates will be lower than they have historically.
  • The industry is trading at a PE ratio of 35.4x which is lower than its 3-year average PE of 50.8x.
  • The 3-year average PS ratio of 10.6x is higher than the industry's current PS ratio of 7.9x.
Past Earnings Growth
  • The earnings for companies in the Software industry have grown 37% per year over the last three years.
  • Revenues for these companies have grown 15% per year.
  • This means that more sales are being generated by these companies overall, and subsequently their profits are increasing too.

Industry Trends

Which industries have driven the changes within the U.S. Tech industry?

US Market-2.65%
Tech-5.92%
Software-2.98%
Application Software-2.07%
Systems Software-3.34%
Industry PE
  • Investors are most optimistic about the Application Software industry which is trading above its 3-year average PE ratio of 55.8x.
    • Analysts are expecting annual earnings growth of 27.1%, which is higher than its past year's earnings growth of 10.2% per year.
  • Investors are most pessimistic about the Systems Software industry, which is trading below its 3-year average of 38.9x.
Forecasted Growth
  • Analysts are most optimistic on the Application Software industry, expecting annual earnings growth of 27% over the next 5 years.
  • This is better than its past earnings growth rate of 10% per year.
  • In contrast, the Systems Software industry is expected to see its earnings grow by 18% per year over the next few years.

Top Stock Gainers and Losers

Which companies have driven the market over the last 7 days?

CompanyLast Price7D1YValuation
PANW Palo Alto NetworksUS$304.205.7%
+US$13.4b		51.7%PE294.1x
DDOG DatadogUS$239.777.5%
+US$6.0b		81.5%PE629.1x
CRM SalesforceUS$158.374.3%
+US$5.4b		-42.1%PE16.2x
FTNT FortinetUS$151.354.6%
+US$4.9b		46.8%PE56.7x
CRWD CrowdStrike HoldingsUS$701.092.4%
+US$4.1b		40.4%PS35x

Latest News

NOW
US$98.34
ServiceNow
7D
3.5%
1Y
-51.9%
APP
US$477.08
AppLovin
7D
1.6%
1Y
42.9%
Seeking Alpha • 9h

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CRM
US$158.37
Salesforce
7D
4.3%
1Y
-42.1%
ORCL
US$148.53
Oracle
7D
-19.4%
1Y
-29.4%
CRWD
US$700.45
CrowdStrike Holdings
7D
2.3%
1Y
40.3%
ADBE
US$202.73
Adobe
7D
3.9%
1Y
-47.5%
PLTR
US$112.93
Palantir Technologies
7D
-12.1%
1Y
-13.6%
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Palantir hits 52 week low.

Palantir has not stopped growing its earnings and revenue, making now an opportune time to initiate a position near its 52-week low. An effective strategy for a long-term position is to scale in across three buying increments.
NBIS
US$240.30
Nebius Group
7D
-16.2%
1Y
363.5%
FTNT
US$151.35
Fortinet
7D
4.6%
1Y
46.8%
MSTR
US$81.98
Strategy
7D
-27.2%
1Y
-78.6%
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DDOG
US$239.78
Datadog
7D
7.5%
1Y
81.5%
Narrative Update • Jun 24

DDOG: Elevated AI Optimism And Rich Pricing Will Constrain Future Returns

Datadog's updated analyst price target rises from a fair value estimate of about $160 to roughly $171, as analysts factor in slightly higher revenue growth expectations, modestly adjusted profitability, and continued enthusiasm around the company's expanding AI observability portfolio. Analyst Commentary Recent Street research around Datadog clusters around a broadly constructive view on the stock, with a series of higher price targets following the DASH user conference and growing focus on the Bits AI product set.
CDNS
US$377.27
Cadence Design Systems
7D
-2.6%
1Y
23.6%
Seeking Alpha • Jun 23

Cadence Design Systems: The Market Is Paying Up, But The Earnings Path Still Works

Summary I rate Cadence Design Systems a Buy with a $460 price target, reflecting 37% upside potential from the current level of $379. My growth drivers are agentic AI inside core EDA, semiconductor IP tied to memory and interconnect, SDA after Hexagon, and steady EPS support from buybacks and acquisition accretion. I assume these growth drivers can support the EPS to move from the current $7.90 to a 2028 adjusted EPS estimate of $10.07. I arrive at my price target by applying the 5-year forward non-GAAP P/E average multiple to my 2028 adjusted EPS estimate of $10.07. The main risk is valuation sensitivity because CDNS is already priced as a premium company, but I believe the backlog, management’s projected 17% revenue growth, strong margins, and AI-driven design demand still support the Buy rating. Read the full article on Seeking Alpha
PANW
US$304.20
Palo Alto Networks
7D
5.7%
1Y
51.7%
Narrative Update • Jun 23

PANW: AI Security And Acquisition Synergies Will Shape Measured Repricing Prospects

The analyst price target for Palo Alto Networks has been raised by about $10 to $310. Analysts point to strong Q3 execution across revenue and annual recurring revenue, rising AI driven security demand, and continued confidence in the company’s platform and acquisition contributions as key supports for higher valuation assumptions.
CRCL
US$73.57
Circle Internet Group
7D
-8.3%
1Y
-59.2%
MSFT
US$372.97
Microsoft
7D
-1.7%
1Y
-24.8%
IREN
US$47.20
IREN
7D
-21.3%
1Y
237.1%